Halliburton and Baker Hughes had imposed a deadline of April 30 to wrap up the deal, first announced in November 2014 with a value of $34.6 billion, and rather than extend it once again the pair believed to have agreed to let it lapse in the face of opposition from US and European anti-trust regulators.

Walking away from the deal means Halliburton needs to pay break-fee to its smaller rival of $3.5 billion, but fortunately that will be covered by some of the $7.5 million in notes Halliburton placed in November, in order to build up its cash reserve to a record of more than $10 billion.

With combined 2015 revenue of $39.3 billion, Halliburton and Baker Hughes control a nearly 16% market share in the oilfield services field, according to data provider IBISWorld.

US and European regulators were concerned about more than two dozen areas where competition could be eliminated between Halliburton and Baker Hughes, and the complexity of the deal terms meant Halliburton was never able to offer to sell enough assets to keep US regulators happy.

On the altar were such sacrificial calves as Baker Hughes's offshore drilling-and-completions fluids division and the bulk of Baker Hughes's completion systems.

Barclays said Baker Hughes could survive as a solo company, and could use the break fee to help rebuild its BJ Services business and cut costs in one of the worst drilling markets for decades.

The analyst said the third largest drilling firm in the world was likely to be able to attract new investors as it is considered a leader in developing new technologies for the oil patch.

An official announcement is expected to be made overnight, with low oil prices and the protracted sales process likely to cop the blame.

Last week, Baker Hughes reported a bigger-than-expected first-quarter loss and warned that the rig count globally would drop steadily through the end of the year because of fewer new projects.

The company said that it carried $110 million of costs during the first quarter that it wasn't able to cut as it could not make sweeping changes to its business without Halliburton's approval, contributing to its $981 million loss.

Halliburton, which delayed its own quarterly report until May 3, reported a 40.4% revenue slump and axed more than 6000 workers last quarter, taking a $2.1 billion restructuring charge mainly for severance costs and asset write-offs.

The number of rigs exploring for oil and natural gas in the US dropped by 11 last week to 420, again reaching an-time low amid depressed energy industry prices.

A year ago, 905 rigs were active.

In Canada there are just 37 rigs working, down from 40 last week and 79 this time last year.